Investor Fear Chart

[tsptalk]

Yes, the difference between AAII and II is a little confusing. Our TSP Talk survey has been somewhere in between the two.

https://www.tsptalk.com/sentiment.php

 

[Bullitt]

RE: AAII reading of 20% bulls. Sentimentraders's comments below.

We've touched on the AAII survey several times in recent months, noting how these investors were not buying into the rally. Far from it. In the past, we've looked at the implied demographics of the survey, and it seems pretty clear that they skew heavily to the older end of the population.

Maybe that's why a massive tech-led rally hasn't excited them as much as rallies in the past. Whatever the reason, such a low level of optimism has rarely been to their benefit.

Backtests show that the S&P 500 has rallied 93% of the time over the next three months when fewer than 20.5% of respondents considered themselves bullish on the market.

We've never seen a rally this large, over this long of a period, and still had so few investors consider themselves bullish.

 

[Bullitt]

RE: NAAIM

A note from Argus Research

This is only the eighth time the NAAIM has reached 100% (we count clusters as one occurrence). About half the time we exceeded 100%, the market saw decent pullbacks in the coming weeks/months; and half the time, the market kept grinding higher as in early and late 2013 and in late 2016.

 

[Bullitt]

Doesn't necessarily mean a crash is on the horizon, but sentiment is not in the bargain buyers favor.

 

[Bullitt]

Burning hot.

 

[bmneveu]

Time for a little cooler?

 

[Bullitt]

Some of that sentiment was worked off, but still kind of up there. Sell when the market is going down, buy when it's going up....

 

[tsptalk]

One channel was broken (red) but perhaps another (blue) held...

 

[Bullitt]

AAII looking promising - bears toeing that 50 buy line. Most bearish since 5 weeks ago.

Bulls: 23.7
Bears: 48.5

 

[Bullitt]

Not where the market needs to be right now. I note that it got down to around 45 for June's bottom.

 

[Bullitt]

AAII: 46 Bears to 24.9 Bulls. Less bulls and more bears than all of August, but still not at that 50 Bear Buy level. I'm thinking next week another push lower to 3100 should do it. CNN gauge saw an improvement as it dropped to the upper 40's.

 

[Bullitt]

From sentimentrader. Large speculators (hedge funds, trend following alogorithms) are $47B short.

Looks like a good bit of fuel to spark another massive rally like the one off the March low.

 

[tsptalk]

Wow, so even large speculators are the dumb money. Who the heck is the smart money? :scratchchin:

 

[Bullitt]

Generally commercial traders in the market indexes would be 'smart money'. Companies like Black Rock, Goldman Sachs, Credit Suisse, UBS, etc. that are offsetting massive bets or buying futures to maintain their index funds.

But yeah, I hear ya. These guys seem to be as mistake and FOMO bound as everyone else.

 

[tsptalk]

The OEX put / call ratios used to be a good smart money indicator (probably still is) but Stockcharts.com no longer posts it for some reason.

https://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=2&mn=0&dy=0&id=p12082053026&a=368209147

 

[Bullitt]

AAII came in at 55.8% bull vs 24.9% bear.

Last time numbers were this skewed was January 2018, a few weeks before that February 2018 drop.

 

[Bullitt]

AAII at 49% bull this week.

Consistent weeks around 50% bull tend to signify a top or near top - but not always. This was the case in Jan 2014, Sep 2014, and Jan 2018. All three saw some kind of correction to the downside.

 

[Bullitt]

B of A fear chart (below) not telling us anything at this juncture, but CNN is at 86 which either says "don't buy here" or that there is such a flood of assets that continue to come off the sidelines that this reading is okay.

I tend to think this bullishness will peter out in mid-late December only to see another ramp up in January with the January effect.

 

[Bullitt]

AAII at 43 bull, 22 bear. Ratio this week is 1.98. Ration of 2 or higher is considered bullish extreme.

"What direction do you think the stock market will be in 6 months?"

Bears have dropped steadily every week since late September high of around 45.

 

[Bullitt]

CNN back to near neutral. CNN is more of an immediate term indicator whereas AAII is a projection 6 months out. AII is still very affected by near term sentiment.